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Facts
The assessee's appeal for AY 2012-13 arose from an order passed in proceedings u/s 143(3) r.w.s. 147. The Assessing Officer initiated reassessment proceedings alleging bogus commodity transactions and cash deposits, leading to additions including unexplained money and cost of improvement. The CIT(A)/NFAC deleted the addition of unexplained money.
Held
The Tribunal held that the addition of cost of improvement was not part of the reasons for reopening by the Assessing Officer. Therefore, the reopening itself was unsustainable. The appeal was allowed based on this reasoning and cited precedents.
Key Issues
Whether the reassessment proceedings were sustainable when the sole surviving issue of addition was not part of the reopening reasons. Whether the reopening was valid given that the primary additions forming the basis of reopening were deleted by the lower appellate authority.
Sections Cited
143(3), 147, 148, 69A
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
Asstt. Year : 2012-13 Prithvi Pal Singh Lamba, Vs Income Tax Officer, House No. 1238, Subhash Nagar, Ward-50(3), Rohtak, Haryana-124001 New Delhi-110002 (APPELLANT) (RESPONDENT) PAN No. AABPL0050C Assessee by: None Revenue by : Ms. Ambika Agarwal, Sr. DR Date of Hearing: 07.10.2025 Date of Pronouncement: 07.10.2025 ORDER This assessee’s appeal for Assessment Year 2012-13, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/1076483764 (1) dated 27.05.2025, in proceedings u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short “the Act”).
Case called twice. None appears at the assessee’s behest. He is accordingly proceeded ex-parte.
It next emerges with the able assistance coming from the Revenue side that the learned Assessing Officer had set into motion section 148/147 proceedings against the assessee alleging some bogus commodity transactions and cash deposits of Rs.15,00,000/- made in the relevant previous year. And that his reassessment framed on 29.12.2019 ended up in making Prithvi Pal Singh Lamba twin additions of unexplained money u/s 69A amounting to Rs.15,00,000/- and disallowance of cost of improvement to the tune of Rs.20,23,447/-; respectively. There is further no dispute that the learned CIT(A)/NFAC has deleted the above section 69A addition of Rs.15,00,000/- in the lower appellate proceedings. It is thus clear in this factual backdrop that the impugned addition of cost of improvement nowhere formed subject matter of reopening reasons by the learned Assessing Officer.
That being the case, learned departmental representative vehemently argues that the tribunal ought to uphold the impugned reopening as the Assessing Officer had duly added Rs.15,00,000/- in the assessee’s hands in his assessment order. She could hardly dispute that the above addition of Rs.15,00,000/- has been deleted in the lower appellate proceedings. Meaning thereby that the sole surviving issue of cost of improvement claimed at the assessee’s behest was not part of the learned Assessing Officer reopening reasons. The question as to whether such a reopening is sustainable or not, is no more res integra in light of CIT Vs. B. P. Poddar Foundation for Education (2022) 448 ITR 695 (Cal.) and Mahesh Kumar [TS-1030-ITAT-2025 (Del)] (TM) wherein settling the instant issue in the assessee’s favour and against the department. I accordingly reject the Revenue’s foregoing
All other pleadings between the parties stand rendered academic.